Local Market Suffering Tight Home Supply

In his 30 years as a Realtor, Harry Mulder had never had to be so patient. A client wanted to buy a house, but the desired size, style and price range of home wasn't available.

"We watched the sheets every day to see what became available," Mulder said, "and I alerted him to be ready to put the offer in quick before someone else got it."

They scrutinized the new listings for 45 days, the longest Mulder said he had ever searched in the Hampton Roads market. It was worth the wait -- the client found the house he wanted.

Real estate agents across Hampton Roads complain that the housing supply is the worst it has been since 1972, resulting in significantly reduced options for buyers relocating to the region. New data for September bears that out.

Home sales jumped almost 13 percent statewide but remained flat here because there simply aren't enough homes on the market to meet demand. Sales of local single-family homes decreased 0.1 percent from September a year ago, the Virginia Association of Realtors reported. Year-to-date sales in Hampton Roads are still 6.25 percent ahead of last year to 18,483 homes sold, up from 17,396. Statewide, however, home sales have jumped 9.35 percent, to 83,950 from 75,769.

The average number of days a home stays on the market in the state is 108 days. In Hampton Roads, it's officially 41 days, but local real-estate agents say it's far less than that.

Agents warn prospective homeowners: Those who hesitate have probably lost the house.

"The days of being able to sit back and think about it for 48 to 72 hours are pretty much gone," said Don Pegram, a Realtor with William E. Wood and Associates' Oyster Point office. "When houses become available, they're gone."

Mulder, who owns and operates Mulder Realty on Warwick Boulevard in Newport News, said this is the lowest inventory of homes for sale he's ever seen.

"We can't set up home tours," he said. "If you gave me specifications of what you want -- say pricing between $90,000 and $120,000 -- I probably will only have one house to show to you. Three years ago, I would have had 20 to 25 houses, and I would have picked out the best ones for you to tour.

"The shortage has really caused the price to increase. Anybody would think it would be great for a Realtor, but in some ways it's been a nightmare. The good thing about it is if you list a home, you can count on it being sold in two or three days."

Kathie Weaver, a Realtor with Century 21 Connors Realty in Newport News, had three homes to show to prospects Monday.

"Listings are hard to come by right now," she said. "But my sales have been pretty consistent the past three years."

Weaver estimates that 60 percent of her homebuyers already live here, while 40 percent are people relocating to the area.

"Most people who move to the area want to get to know it before they'll buy," she said. "But there's actually been a shortage of rental property this year so that's moved a lot of people into buying."

The main reason for the low inventory is the law of supply and demand.

"You've got the same amount of people selling, but there are more people buying," said Kim Upchurch with ERA Realty 1 on King Street in Hampton. "I've been in real estate for 12 years, and I haven't seen it this low. It's so low that just about every single-family home has multiple offers -- buyers are competing with other buyers. A lot of sellers are getting more than the asking price. It's been going on for over a year, but it's gotten worse since the beginning of the summer."

She said interest rates fluctuating between a tantalizing 6 percent and 6.5 percent are luring homebuyers. Some potential sellers, however, are reluctant to list properties right now because of the uncertainty about the economy and a possible war with Iraq.

"The inventory is a little low at the moment," said Greg Loper, a partner with Long & Foster Realtors in Williamsburg. He said the lowest sales he's seen were right after Sept. 11. "But we saw a pretty good rebound the first quarter of this year. My guess is consumer confidence is rather low, so people are holding on to the properties that they have. With the interest rates, I think people are more into refinancing."

Mortgage rates have sunk to the lowest levels since the mid-1960s, triggering a rush of home purchases and refinancings that helped prop up the nation's economy. David Seiders, chief economist for the National Association of Home Builders, predicted that mortgage rates would remain near current levels through the end of the year and then rise slowly in 2003 and 2004.

"I still have not heard any indication that buyers aren't finding homes eventually," said Rebecca Grossman, executive vice president of the Peninsula Association of Realtors. "It's not a crisis situation where they absolutely cannot find a home, which is a good indication that the market's staying pretty healthy around here."

EXISTING-HOME SALES

A tight supply of Hampton Roads homes on the market led to a decline in September's sales:

Sept. 2001 Sept. 2002 % change

Hampton Roads

1,993 1,991 -0.10%

Virginia

8,230 9,288 12.86%

U.S.

416,000 488,000 7.7%

- Sources: Virginia and National Association of Realtors

Sarah Sue Ingram can be reached at 247-4767 or by e-mail at ssingram@dailypress.com